April 02, 2021 | 09:05
U.S. Nonfarm Payrolls (Mar.) — Great Friday for Workers
The American jobs engine cranked into top gear in March as hiring streamed back in areas hit hard by previous restrictions/anxiety and as vaccinated travelers hit the road to make up for lost time. Nonfarm payrolls surged 916,000, about a third more than expected. The gains were widespread, led by leisure and hospitality (280,000, though still 3.1 million shy of pre-virus levels or -18.5%). Here, restaurants and bars ramped up staff by 176,000. Also leading the charge were education, construction (rebounding 110,000 after February's weather-related decline), arts and entertainment, and accommodation. Private payrolls zoomed 780,000. To boot, the prior two monthly gains were revised up a total of 156,000 to a combined 700,001.
The household survey reported 609,000 more jobs, carving the unemployment rate a couple of notches to 6.0%. The more comprehensive U6 measure fell four-tenths to 10.7%. The participation rate edged up, though it remains 1.8 ppts below February 2020 levels, suggesting plenty of room for former workers to return to the labour force.
Average hourly earnings shed a tenth, cutting its yearly rate a full percentage point to 4.2%, reflecting the high concentration of returning jobs in lower-paying industries.
Aggregate work hours rebounded 1.5% after sliding the prior month, putting them 3.1% annualized above Q4 levels. Assuming a nice bounce in productivity, GDP growth looks to strengthen to 5.0% a.r. in Q1.
Bottom Line: Job growth is now accelerating across the nation, helped by massive fiscal stimulus and a now speedy vaccination program. There are still 8.4 million jobs to recover from the pandemic (or -5.5%), but that could be achieved sooner than expected if hiring remains this strong in coming months. Meantime, the Fed will focus on the 9.7 million unemployed, or 4.0 million more than before the pandemic, keeping policy rates down for some time to come.